Boeing Launches 90M Common Shares, $5B Depositary Offering

Boeing has initiated a major capital-raising effort with an offering of 90 million shares of common stock and $5 billion in depositary shares. The company has also provided underwriters a 30-day option to acquire an additional 13.5 million common shares and $750 million in depositary shares to cover over-allotments, potentially increasing the total capital raised.

The net proceeds from these offerings will be directed toward Boeing’s general corporate needs, including debt repayment, working capital, capital expenditures, and investments in key subsidiaries. This funding effort aligns with Boeing’s recently announced plan to secure up to $35 billion in financing to address ongoing operational and financial challenges. The company has also received U.S. Securities and Exchange Commission (SEC) approval to raise up to $25 billion through various stock and debt sales.

Boeing’s move to bolster liquidity comes amid a period of financial strain exacerbated by recent labor disruptions and production challenges. The company recently disclosed a third-quarter net loss of $6.17 billion for 2024, reflecting a significant setback as it deals with supply chain issues, operational delays, and rising costs. Production was also impacted by a six-week strike by the International Association of Machinists and Aerospace Workers (IAM) Local 751, which saw 64% of its 33,000 members reject Boeing’s latest contract proposal on October 23, 2024.

The strike affected the production of Boeing’s key aircraft models, contributing to delivery delays and affecting revenue streams from high-demand models like the 737 MAX and 787 Dreamliner. Boeing’s strained finances have also drawn attention to ongoing safety and quality control concerns. Earlier this year, an Alaska Airlines Boeing 737 MAX 9 experienced a door blowout incident on January 5, which remains under investigation and has led to increased scrutiny of Boeing’s production quality and safety procedures.

This capital infusion from the stock and depositary share offerings is intended to provide Boeing with the financial flexibility to stabilize operations and address these issues while continuing to make essential investments in its core business segments. As Boeing navigates these financial and operational hurdles, CEO David Calhoun emphasized the importance of reinforcing Boeing’s foundation for growth and resilience, stating that these capital measures will support the company’s long-term strategy and strengthen its market position.

In addition to replenishing its cash reserves, Boeing’s recent SEC approval to raise funds through stock and debt sales reflects its strategy to improve liquidity and manage debt levels. The company aims to remain competitive in the aerospace market while positioning itself to meet increasing demand for both commercial and defense aircraft.

Through these funding efforts, Boeing is working to regain stability and fulfill its financial commitments while addressing pressing operational challenges. This extensive capital initiative is expected to enable Boeing to continue its recovery path, improve production capacity, and rebuild trust with its customers, workforce, and stakeholders.

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